The way I do it, I usually just download the movie through a file-sharing program and then use a program called "Jodix: Free iPod Video Converter" to convert the avi files to mp4 format. It's easy to do and free. Here's the link: link Hope this helps :).
u just need to convert your DVD movie of video to mp4 video, and then u can drag it to your iTunes library, plug in your iPod to computer, iTunes will detect it automatically, then click iTunes menu "File -> Sync iPod", that's all. If u need details, here is a step door step guide would help youa lot, it's easy to understand and works pretty well for me